Summary of Weekly Petroleum Data for the week ending October 26, 2018 with my comments in blue.
U.S. crude oil refinery inputs averaged 16.4 million barrels per day during the week ending October 26, 2018, which was 149,000 barrels per day more than the previous week’s average. Refineries operated at 89.4% of their operable capacity last week. Gasoline production increased last week, averaging 10.4 million barrels per day. Distillate fuel production increased last week, averaging 5.0 million barrels per day. < We should see refinery utilization rate increase as they come out of annual maintenance and they need to ramp up distillate production.
U.S. crude oil imports averaged 7.3 million barrels per day last week, down by 334,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.5 million barrels per day, 2.5% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 363,000 barrels per day, and distillate fuel imports averaged 141,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.2 million barrels from the previous week. At 426.0 million barrels, U.S. crude oil inventories are about 2% above the five year average for this time of year.
> Total motor gasoline inventories decreased by 3.2 million barrels last week and are about 6% above the five year average for this time of year. Finished gasoline inventories increased while blending components inventories decreased last week.
> Distillate fuel inventories decreased by 4.1 million barrels last week and are about 5% below the five year average for this time of year.
> Propane/propylene inventories increased by 1.0 million barrels last week and are about 3% below the five year average for this time of year.
>> Total commercial petroleum inventories decreased last week by 6.4 million barrels last week. < Demand remains strong.
Total products supplied over the last four-week period averaged 20.6 million barrels per day, up by 5.4% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.2 million barrels per day, down by 1.5% from the same period last year. Distillate fuel product supplied averaged 4.2 million barrels per day over the past four weeks, up by 14.2% from the same period last year. Jet fuel product supplied was down 3.7% compared with the same four-week period last year.
IEA's Weekly Petroleum Report - Oct 31
IEA's Weekly Petroleum Report - Oct 31
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: IEA's Weekly Petroleum Report - Oct 31
Key stats in the EIA report.
1. U.S. oil production has been flat since the beginning of June: 10.8 million barrels per day the week ending 6/1/2018 and 10.9 million barrels per day the week ending 10/19/2018.
2. The "Right Way" to look at inventories is Days of Supply, not by volume compared to the 5-year average. We use and we export a lot more refined products than we did five years ago.
The U.S. economy is VERY DEPENDENT on a steady supply of refined hydrocarbon based liquids. We should have 30 days of supply, but we do not.
Days of Supply
25.9 for Crude Oil
25.0 for Gasoline (and we export a lot of gasoline)
25.7 for Jet Fuel
32.0 for Distillates (and we export a lot of diesel and the winter heating season is just a few weeks away)
My opinion on why oil prices have pulled back during October:
> September and October is a period of refinery maintenance which lowers demand for crude oil.
> Market's perception that sanctions against Iran will not reduce supply as much as feared. < I think the Wall Street Gang is wrong about this.
> Uncertainty about outcome of the mid-term elections. Fear that Democrats will gain control and immediately talk about raising taxes against "The Rich" and the "Mean Corporations".
> General lack of knowledge about the seasonality of demand for refined products. Demand for heating oil is about to increase.
> General lack of knowledge about OPEC's ability to increase production. There is now almost no remaining production capacity in the world.
> Market corrections do have an impact on oil prices because they fuel the fear of economic slowdown & reduced demand for energy.
> Strength of the U.S. dollar.
I believe two things will happen in November:
1. GOP will retain control of the U.S. government.
The HUGE impact on the Net Income of upstream companies as a result of the lower income tax rates has not yet been priced into the stock prices.
2. The sanctions against Iran do "have teeth" and will take a lot more oil supply off the market.
As we move thru 2019, the impact of IMO 2020 will draw a lot more attention. In a very tight global oil market, IMO should push Brent over $100/bbl by Q4 2019.
1. U.S. oil production has been flat since the beginning of June: 10.8 million barrels per day the week ending 6/1/2018 and 10.9 million barrels per day the week ending 10/19/2018.
2. The "Right Way" to look at inventories is Days of Supply, not by volume compared to the 5-year average. We use and we export a lot more refined products than we did five years ago.
The U.S. economy is VERY DEPENDENT on a steady supply of refined hydrocarbon based liquids. We should have 30 days of supply, but we do not.
Days of Supply
25.9 for Crude Oil
25.0 for Gasoline (and we export a lot of gasoline)
25.7 for Jet Fuel
32.0 for Distillates (and we export a lot of diesel and the winter heating season is just a few weeks away)
My opinion on why oil prices have pulled back during October:
> September and October is a period of refinery maintenance which lowers demand for crude oil.
> Market's perception that sanctions against Iran will not reduce supply as much as feared. < I think the Wall Street Gang is wrong about this.
> Uncertainty about outcome of the mid-term elections. Fear that Democrats will gain control and immediately talk about raising taxes against "The Rich" and the "Mean Corporations".
> General lack of knowledge about the seasonality of demand for refined products. Demand for heating oil is about to increase.
> General lack of knowledge about OPEC's ability to increase production. There is now almost no remaining production capacity in the world.
> Market corrections do have an impact on oil prices because they fuel the fear of economic slowdown & reduced demand for energy.
> Strength of the U.S. dollar.
I believe two things will happen in November:
1. GOP will retain control of the U.S. government.
The HUGE impact on the Net Income of upstream companies as a result of the lower income tax rates has not yet been priced into the stock prices.
2. The sanctions against Iran do "have teeth" and will take a lot more oil supply off the market.
As we move thru 2019, the impact of IMO 2020 will draw a lot more attention. In a very tight global oil market, IMO should push Brent over $100/bbl by Q4 2019.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: IEA's Weekly Petroleum Report - Oct 31
Phil Flynn at 9:48 ET on 10/31/2018
October was downright scary. We had ghosts of stock market crashes past as well as some amazing moves. Oil in some sense bought into fear of an economic slowdown because the stock market gyrated like Linda Blair’s head in the movie the Exorcist. Yet, despite those fears and terrors of a slowdown the oil demand remains incredible, ahead of oil sanctions on Iran that are going to tighten supply even further. While the oil market is acting like the impact from the sanctions is priced in, get ready for the bulls to rise from the grave and scare the sanctions out of the bears. The spooky October selloff in oil may be over after price bounced off the 200-day moving average and the American Petroleum Institute reported a scary drop in both gasoline and distillate supply. Refiners are not building supply as the market is sucking down supply like a blood sucking vampire. The API reported that distillate supply dropped further below average, falling by a 3.1 million barrels. Even gasoline supply fell by 3.5 million barrels! Shriek! Thank goodness that crude supply increased, because based on demand we are going to need every barrel of that and then some.
Even as we get a report that U.S. sanctions are starting to hurt the Chinese Manufacturing industry. China’s official manufacturing Purchasing Managers’ Index (PMI) for October came in at 50.2, just barely an expansion the lowest reading since July of 2016 when oil started to falter as the Chines economy stumbled. Yet, the difference this time is that U.S. manufacturing is on the upswing. On Oct 15, the New York Fed reported that the Empire State manufacturing index rose 2.1% to 21.1 in October surpassing September’s reading of 19. Notably, any reading above zero indicates improvement in manufacturing sector. The ISM, going into the month, was at 59.8. So as China loses in Manufacturing the U.S. Is gaining. (Trump's Tax Cuts are bring manufacturing jobs back to the U.S.)
The scariest part of Halloween this year is that it is ending. October and November is when the scary part begins. Refiners are coming out of maintenance and will be running at a record pace. Global oil supplies at the same time are going to be squeezed despite promises of more oil from Saudi Arabia. Iran sanctions will cut anywhere from 700,000 to 1.5 million barrels of supply and the Saudi might add about 300,000 barrels.
Global spare production capacity is at a record low while global oil demand is at record highs. Oil in storage, both on shore and offshore, has fallen drastically. Reuters reports that Imports of Iranian crude by major buyers in Asia hit a 32-month low in September, as China, South Korea and Japan sharply cut their purchases ahead of the sanctions on Tehran, government and ship-tracking data showed. Iran is the third-largest oil producer representing OPEC and the production level in Iran slipped to below 3.8 million barrels per day (bpd) for the first time this year in September.
October was downright scary. We had ghosts of stock market crashes past as well as some amazing moves. Oil in some sense bought into fear of an economic slowdown because the stock market gyrated like Linda Blair’s head in the movie the Exorcist. Yet, despite those fears and terrors of a slowdown the oil demand remains incredible, ahead of oil sanctions on Iran that are going to tighten supply even further. While the oil market is acting like the impact from the sanctions is priced in, get ready for the bulls to rise from the grave and scare the sanctions out of the bears. The spooky October selloff in oil may be over after price bounced off the 200-day moving average and the American Petroleum Institute reported a scary drop in both gasoline and distillate supply. Refiners are not building supply as the market is sucking down supply like a blood sucking vampire. The API reported that distillate supply dropped further below average, falling by a 3.1 million barrels. Even gasoline supply fell by 3.5 million barrels! Shriek! Thank goodness that crude supply increased, because based on demand we are going to need every barrel of that and then some.
Even as we get a report that U.S. sanctions are starting to hurt the Chinese Manufacturing industry. China’s official manufacturing Purchasing Managers’ Index (PMI) for October came in at 50.2, just barely an expansion the lowest reading since July of 2016 when oil started to falter as the Chines economy stumbled. Yet, the difference this time is that U.S. manufacturing is on the upswing. On Oct 15, the New York Fed reported that the Empire State manufacturing index rose 2.1% to 21.1 in October surpassing September’s reading of 19. Notably, any reading above zero indicates improvement in manufacturing sector. The ISM, going into the month, was at 59.8. So as China loses in Manufacturing the U.S. Is gaining. (Trump's Tax Cuts are bring manufacturing jobs back to the U.S.)
The scariest part of Halloween this year is that it is ending. October and November is when the scary part begins. Refiners are coming out of maintenance and will be running at a record pace. Global oil supplies at the same time are going to be squeezed despite promises of more oil from Saudi Arabia. Iran sanctions will cut anywhere from 700,000 to 1.5 million barrels of supply and the Saudi might add about 300,000 barrels.
Global spare production capacity is at a record low while global oil demand is at record highs. Oil in storage, both on shore and offshore, has fallen drastically. Reuters reports that Imports of Iranian crude by major buyers in Asia hit a 32-month low in September, as China, South Korea and Japan sharply cut their purchases ahead of the sanctions on Tehran, government and ship-tracking data showed. Iran is the third-largest oil producer representing OPEC and the production level in Iran slipped to below 3.8 million barrels per day (bpd) for the first time this year in September.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: IEA's Weekly Petroleum Report - Oct 31
The oil price is down almost 2%. Hopefully it will find some support in November. When are the Iranian sanctions scheduled to begin?
Re: IEA's Weekly Petroleum Report - Oct 31
Full impact of the sanctions on Iran start November 4.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: IEA's Weekly Petroleum Report - Oct 31
Do you think the Saudis are playing a game to pump as much oil as possible with the problems they are having after the journalist incident?
Re: IEA's Weekly Petroleum Report - Oct 31
Yes, I think Saudi Arabia is doing everything they can to suck up to Trump.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group